Economy & Market

Bulking up

Published

6 years ago

March 31, 2018

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More and more RMC players and project implementing agencies are opting for bulk deliveries against split bags to save on costs and to curtail wastage.
Bulk distribution of cement is slowly but steadily replacing the once ubiquitous cement bags, changing the composition of cement channel supply chains forever. Bulk cement is consumed by ready mix concrete (RMC) manufacturers and project implementing agencies across the country. However, bag cement is refusing to disappear from the scene. For other activities like plastering, brickwork etc., bag cement is required, besides catering to the rural demand, where a lot of consumers order lower quantities.

"About 75% of requirements of RMC manufacturers are supplied through bulk only. The trend is building up towards bulk as wastage is low and cost is competitive. It saves on the cost of bags and wastage is less than one per cent. In the next couple of years, the trend will continue towards bulk," says AK Bal, Director of Pune-based Viraj Projects Pvt Ltd, which deals in steels, sand, dyes, bricks and tiles, besides cement.
Earlier the concept was use of split bags for even medium and big projects. But the trend is changing for several reasons. "Now, everybody has installed silos and has a big RMC plantat the site, particularly in South Mumbai, where you can see new towers coming up. They go for RMC orders, practically due to space constraints. This is the reason bulk cement has moved there, and this trend will continue," says Nikesh Parekh of Mumbai-based Span Cements, which also deals in paints, construction chemicals and tile adhesives.
For urban supplies and infrastructure projects, bulk supplies are being preferred, so demand for bulk supplies is expected to rise, says Bal, citing the example of Odisha, where bulk cement supplies were almost absent a year ago and gaining prominence of late.
Cement bag go into retail shops, who supply it to small contractors. "With the entry of specialised products like ready-made plasters, tile adhesives, mortars, polymer mortars etc., bag cement in retail will slowly diminish in future. In other developed countries, you do not get loose bag cements." Independent dealers
Few producers sell their goods directly to the final users. But, most use intermediaries to bring their products to market. The latter involves forging marketing channels, which can be described as a set of interdependent organizations that help make a product or service available for use or consumption by the consumer. Hence a company’s channel decisions will have a direct bearing on its marketing success.
There is an apprehension that some independent marketing players could takeover the building material channel operations wholesale in the days to come. There are already a couple of start-ups which are doing this in building materials. Nitin Vyas, Managing Director, Beumer Group says, "I believe that the next step for it would be having a platform for all cement-related industries to become an Uber (online call taxi service) of cement distribution. In the end, the cement producers would be containers, but the interface to the market would be the service companies who are reaching the material to the end customers. And that can’t be stopped."
Even some of the dealers have started guarding against this impending trend though it is not widely prevalent as of now. Span Cements has already started taking orders online from their customers. However, if online orders are accepted by any firm then they may seek payment in advance.
But for that there is no big change in the cement channels. The dealers opt for multiple dealerships for cement, so that they cannot disappoint any customer seeking a particular brand. Single dealerships are a rarity. Dealer-based
Cement is a pure commodity. Most of the cement manufacturers still deal with customers through distributors or dealers. "Though the companies are maintaining accounts of some key customers, the supplies are routed through dealers and distributors. Companies never supply cement directly to anybody. They want to encourage distributors also for insuring their receivables. The companies want to get their payment on time, so dealer will be in between to take care of payments," says Bal of Viraj.
"We have virtually become insurance agent for our principal (manufacturer for their receivables) than a marketing agent, and financier for our customer," Parekh says while explaining the role of cement dealers in the supply chain. For steel sector it is different – there customer pay interest for delayed payment. In steel, direct supply system from manufacturers is still prevalent. As far as sand goes, they have to make the spot payment, because natural sand is a very scarce commodity today. Whatever available is manufactured sand.
Comparing the channels between cement and steel, Bal says, "Another difference is cement has to be consumed within three months from the date of manufacture, hence some dealers push it through credit. That is not the case with steel, which can be stored for a couple of years without erosion in quality, if properly stored."
There is a general consensus among the dealers ICR has contacted about the upward trend in cement prices in the coming months, mostly banking on the pre-election infrastructure boost that will take place in the next 12 months before general elections scheduled for May 2019.
Bal of Viraj is expecting the cement prices to go up to Rs 270 plus GST per bag in the next two quarters from the present level of 230 plus GST in Pune. Even builders are trying to complete their projects at the earliest to cash in on their land banks. The reason is that earlier the building prices were going up rapidly giving hope that the builders can make more money if the project is delayed. Now, there is no such hope. "Now the rise in building/floor price is only 4-5 per cent a year, which is not sustainable if the project is delayed as it does not even cover the incremental interest cost incurred. Besides, input prices are moving up," Bal added.
If there is any hindrance to cement demand growth that is ‘availability of finance’, particularly in the wake of the government swooping down on defaulting companies and bad loans. "Financing has become tight everywhere. We (as dealers) have a certain capacity and I cannot go beyond that or else I will also fall. If any builder calls me and tells me that I can only pay you only a couple of weeks later, I will have to accept it. Otherwise they will stop taking my supplies. As far as payments to companies are concerned, we work on one principle – RTGS in 48 hours."– BS Srinivasalu Reddy

Economy & Market

RAHSTA to showcase cutting-edge road construction tech, says NCC Director

Published

4 days ago

April 19, 2024

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14th RAHSTA (Roads and Highways Sustainable Technologies & Advancement) Expo – India’s biggest road exhibition – will be held as a part 10th India Construction Festival 2024 at Jio Convention Centre, Mumbai, from October 9-10, 2024.

April 10, 2024, Delhi

“The RAHSTA expo will offer extensive information about the latest technology and methods for constructing high-quality roads. Currently, the challenge facing the roads industry is to uphold road quality and execute projects efficiently. RAHSTA will provide opportunities for everyone to learn about the latest worldwide technologies and equipment available, undoubtedly offering valuable insights to those involved in the roads sector,” said Vinod Kumar Yadav, Director – Transport, NCC, and former Chairman, Railway Board, while speaking during the launch of a road show – 14th RAHSTA Expo, which will be held from October 9-10, 2024, at Jio Convention Centre, Mumbai.

RAHSTA, which stands for Roads and Highways Sustainable Technologies & Advancement, is a dedicated event to the world of road construction equipment, technology, and sustainability.

“The Ministry of Road Transport & Highways has constructed 12,349 km of national highways in 2023-24 – the second highest achievement! In 2020-21 a record 13,327 kms had been constructed, the highest so far. The experience of a well-constructed road is no accident but a badly constructed one can cause many,” stated Pratap Padode, Founder, FIRST Construction Council, a pioneering infrastructure-driven council focused on advancing India’s infrastructure development.

Also speaking at the launch, former Managing Director of Ashok Leyland & JCB, Vipin Sondhi, also Chairman of RAHSTA Expo Committee underscored the need for specialised platforms like RAHSTA Expo for the burgeoning road construction industry.

Ashish Kumar Singh, CGM – Finance, National Highway Authority of India; RK Pandey, former NHAI member and Member of RAHSTA Expo Committee; SK Nirmal, Secretary General, Indian Roads Congress and Member of RAHSTA Expo Committee; Prof Satish Pandey, Principal Scientist, CSIR-Central Road Research Institute, Ministry of Science and Technology; Ankit Jain, CFO, Cube Highways Growth Advisors, Vijay Agrawal, Executive Director, Equirus Capital; and Subodh Dixit, Former Executive Director, Shapoorji Pallonji, participated in a round table discussion on the new BOT proposals.

The launch function at PHD Chamber for RAHSTA Expo was attended by who’s who of the infrastructure industry such Lt Gen Harpal Singh, President, International Road Federation and former Engineer-in-Chief, Indian Army; Akhilesh Srivastava, Road Safety Ambassador, International Road Federation; Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery; Rajesh Menon, Director General, Society of Indian Automobile Manufacturers; Raman Kapil, President, Tata Projects; Anand Sundaresan, Director, Ammann India; Dheeraj Panda, Managing Director, Ammann India; Rajan Aiyer, Managing Director, Trimble; Satin Sachdeva, Founder & Secretary General, Construction Equipment Rental Association; Dr Swamy, Chairman, The Institution of Civil Engineers and Dr Ranjeet Mehta, Executive Director of PHDCCI, among others.

Organised by the FIRST Construction Council, the RAHSTA Expo 2024, which will be held as part of 10th India Construction Festival, will bring together industry leaders, innovators, and stakeholders for two days of exploration, collaboration, and transformation.

Besides RAHSTA Expo 2024, the India Construction Festival 2024 will include the following:

Exhibitors can use RAHSTA Expo 2024 to showcase their construction machinery, building material machines, mining machines, and construction vehicles to a targeted audience of industry professionals. RAHSTA Expo will be an ideal platform to connect with key decision-makers, generate leads, and grow business in this rapidly expanding market.

Contact:

For exhibitor enquiries (for RAHSTA Expo), contact Mr Sujoy on Mob: +91 86577 95881, or Email: sujoy.g@asappinfoglobal.com

For delegate enquiries (for conferences), contact Mr Amar on Mob: +91 86524 93000, or Email: delegate1@asappinfoglobal.com

Economy & Market

RAHSTA will drive road construction innovation: Sundaresan

Published

5 days ago

April 18, 2024

admin

April 10, 2024, Delhi

“We believe RAHSTA is the ideal platform for our presence, and we are confident in our participation in the upcoming expo scheduled for October,” said Anand Sundaresan, Director, Ammann India, while speaking during the launch of a road show – 14th RAHSTA Expo, which will be held from October 9-10, 2024, at Jio Convention Centre, Mumbai. RAHSTA, which stands for Roads and Highways Sustainable Technologies & Advancement, is a dedicated event to the world of road construction equipment, technology, and sustainability.

Sundaresan added, “We predominantly specialise in road construction machinery, such as asphalt plants, concrete batching plants, pavers, and rollers, among others. Additionally, we offer ancillary equipment like supers. With the government placing significant emphasis on infrastructure development, there is a substantial demand for road construction machinery. Particularly noteworthy is the growth witnessed in the last year (2023-2024), with a surge in orders. Moreover, the construction of airports is underway, necessitating equipment for runway construction. We perceive immense potential and opportunity for growth within the industry.”

“The Ministry of Road Transport & Highways has constructed 12,349 km of national highways in 2023-24 – the second highest achievement! In 2020-21 a record 13,327 kms had been constructed, the highest so far. The experience of a well-constructed road is no accident but a badly constructed one can cause many,” stated Pratap Padode, Founder, FIRST Construction Council, a pioneering infrastructure-driven council focused on advancing India’s infrastructure development.

Padode was speaking at the launch of a road show – 14th RAHSTA Expo, which will be held from October 9-10, 2024, at Jio Convention Centre, Mumbai. RAHSTA, which stands for Roads and Highways Sustainable Technologies & Advancement, is a dedicated event to the world of road construction equipment, technology, and sustainability.

Speaking at the launch, former Managing Director of Ashok Leyland & JCB, Vipin Sondhi, also Chairman of RAHSTA Expo Committee underscored the need for specialised platforms like RAHSTA Expo for the burgeoning road construction industry.

Ashish Kumar Singh, CGM – Finance, National Highway Authority of India; RK Pandey, former NHAI member and Member of RAHSTA Expo Committee; SK Nirmal, Secretary General, Indian Roads Congress and Member of RAHSTA Expo Committee; Prof Satish Pandey, Principal Scientist, CSIR-Central Road Research Institute, Ministry of Science and Technology; Ankit Jain, CFO, Cube Highways Growth Advisors, Vijay Agrawal, Executive Director, Equirus Capital; and Subodh Dixit, Former Executive Director, Shapoorji Pallonji, participated in a round table discussion on the new BOT proposals.

The launch function at PHD Chamber for RAHSTA Expo was attended by who’s who of the infrastructure industry such Lt Gen Harpal Singh, President, International Road Federation and former Engineer-in-Chief, Indian Army; Akhilesh Srivastava, Road Safety Ambassador, International Road Federation; Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery; Rajesh Menon, Director General, Society of Indian Automobile Manufacturers; Raman Kapil, President, Tata Projects; Anand Sundaresan, Director, Ammann India; Dheeraj Panda, Managing Director, Ammann India; Rajan Aiyer, Managing Director, Trimble; Satin Sachdeva, Founder & Secretary General, Construction Equipment Rental Association; Dr Swamy, Chairman, The Institution of Civil Engineers and Dr Ranjeet Mehta, Executive Director of PHDCCI, among others.

Besides RAHSTA Expo 2024, the India Construction Festival 2024 will include the following:

Contact:

For exhibitor enquiries (for RAHSTA Expo), contact Mr Sujoy on Mob: +91 86577 95881, or Email: sujoy.g@asappinfoglobal.com

For delegate enquiries (for conferences), contact Mr Amar on Mob: +91 86524 93000, or Email: delegate1@asappinfoglobal.com

Concrete

New appointment at TMEIC

Published

6 days ago

April 17, 2024

admin

TMEIC Industrial Systems India, a Group company of TMEIC Corporation, Japan, has announced the appointment of Hidekazu Matsushima as the new Managing Director. Matsushima has been associated with Mitsubishi Electric FA division for domestic market in Japan since 1991 and been assigned in Industrial division in 1994, where he rolled out his mission of sales, marketing and business development of General industry (GI) such as paper, film, Oil & Gas, petrochemical, cement, food, automobile, semiconductor industries in Japan. During the establishment of TMEIC in Japan in 2003, he was assigned with the responsibility for domestic GI market Sales in Japan HQ, and then in plant and energy sales department.